A trading example (of which I did not participate at all) of the day – the company in question is Pacific & Western Credit Corporation:
We see the stream of trades:
| Time | Price | Shares | Change |
| 14:11 | 3.000 | 200 | -0.250 |
| 14:11 | 3.010 | 400 | -0.240 |
| 14:11 | 3.000 | 3,000 | -0.250 |
| 14:11 | 2.760 | 900 | -0.490 |
| 14:11 | 2.900 | 500 | -0.350 |
| 14:10 | 3.160 | 5,000 | -0.090 |
What happened?
Some guy put in an order to sell 5000 shares, and got filled in at 3.16. This might have triggered a stop order, which was sent to the market at the nearest available bids, in this case 2.90 and 2.76. The market maker likely stepped in at this point and picked up shares at 3 and above. Right now the bid-ask is 3.12-3.17.
The advice I have for absolutely everybody is you should never, EVER use market orders. If you must hit the market, enter in a limit order buy at the ask or above, or a limit order sell at the bid or below, but never use market – it is just giving a blank cheque to people that most certainly rip you off.
Whoever was on the selling end of those 900 shares at 2.76 paid about $360 for the privilege of getting rid of their shares at a low price.